Operators have been looking for new 5G revenue opportunities mainly in the enterprise sector on the assumption that the consumer mobile sector is a well-trodden path. But in the wake of the ‘new normal’ amid COVID-19, operators may be overlooking the most obvious 5G moneymaker: households.
A new paper from industry analysts Omnisperience says that there’s huge short term and longer term growth potential for ICT firms that can better address the emerging opportunity within households – provided telcos resegment their market and understand what’s happening in those households.
Telcos have spent billions on designing, deploying and innovating new networks such as 5G and FTTP. But – as has been the case with previous network refreshes – they’ve done so without a clear strategy for generating enough revenue to offset the massive capex involved, with the consumer proposition particularly uncertain.
However, says the Omnisperience paper, the lockdown experience for many households in various markets revealed that existing consumer mobile, broadband, packages, prices and service levels didn’t cut it – and still don’t in the ‘new normal’ of working from home, videoconferencing and streaming video that has taken hold in the wake of COVID-19 (which, incidentally, isn’t over yet).
Not only do households need telcos to offer higher QoS for home working, running nanobusinesses from home and for high-quality entertainment services, but they also need more cloud-based services, cybersecurity, assurance and ‘managed lifespace’ services.
At a very basic level mass homeworking requires ICT providers to address the gaping historic divide between B2C and B2B customers which determines which services can be offered to them. It means rethinking and refreshing bundles, pricing strategies and offers to better meet the emerging needs of smart lifespaces.
That’s why telcos need to seriously rethink their customer segmentation as well as the bundles, pricing and offers targeted at households, says Omnisperience chief analyst Teresa Cottam.
“A lot’s been written about the revenue-generating potential of 5G, but many of these so-called opportunities have no proven demand and are either improbable, highly speculative, hard to deliver, or some way off. Service providers need new revenue streams today, but, as is often the case, they’re overlooking the obvious,” she says.
Cottam says the lockdowns and social distancing measures resulting from the coronavirus pandemic demonstrates clearly that the household is no longer what many ICT firms believe it to be. “It’s become a different size and shape because people are living differently. It’s become a hive of business. And it’s utilizing an ever-wider range of technologies. But it’s also increasingly frustrated because service providers are not adequately addressing its needs.”
Telecoms service providers have historically been bad at cross-selling and upselling to consumers, take a very narrow view of what they sell to households, and by failing to address the emerging opportunity have handed huge revenue streams to rival ICT players, Cottam adds.
Cottam warns that households are frustrated at having to buy technologies from dozens of suppliers and then having to try and integrate and support disparate products – which in turn creates a security nightmare. “Inevitably there are gaps that can be exploited by criminals in the form of cybersecurity issues, but equally when things go wrong, aren’t compatible or don’t provide the level of service the household now needs someone inside the house has to use their precious time to fix things.”